Oxygen Bio Takes Big Step Forward

| About: Tenax Therapeutics, (TENX)

This morning, Oxygen Biotherapeutics (OXBT) announced that the company has begun distribution of its new formulation of Dermacyte (perfluorocarbon oxygen concentrated gel) for the beauty and skin care market. This is essentially the full-scale rollout of Dermacyte following the pilot launch in the fourth quarter 2009 when the company made available 5,000 boxes on the company’s website, www.BuyDermacyte.com.

According to management, the product sold out in the first month after the initial stock became available online. The new formulation, which will be manufactured in continuing batches, incorporates a smoother and more effective concentrate to provide oxygen to the skin. The product helps promote the healthy appearance of skin by minimizing the appearance of fine lines, brightening and smoothing the complexion, and by keeping skin moist and oxygenated.

Currently marketed as a facial cream, eventually management plans to launch an even newer formulation of Dermacyte as an eye cream. The Dermacyte eye cream will incorporate fragrances and moisturizers to the formulation, including sunflower oil, avocado essence, vitamin C, and other antioxidants. This should become available during the summer of 2010.

Oxygen Bio plans to sign distribution partners to help maximize the direct to consumer rollout. With Dermacyte, management has a platform product line that can be expanded to include eye creams, facial creams, moisturizers with SPF, hand and body lotions, toners, lip balms, exfoliators and regenerating serums.

Next Up: Wundecyte

Oxygen is critical for the efficient healing by promoting healthy cell growth and recovery in damaged cells. Oxygen is also very important in maintaining an aseptic environment, as many of the more dangerous bacteria of the Staphylococcus, Streptococcus and Clostridium class are highly oxygen intolerant. This is important in treating wounds, burns and acne.

Wundecyte is an adhesive bandage that sticks to the skin as a traditional bandage would, except that the center contains a fabric coated with a magnesium peroxide (MgO2) powder that releases O2 when mixed with moisture (H2O). It is a self-contained system that delivers O2 to the wound for approximately 6 hours. We view Wundecyte as a “mini-hyperbaric chamber” able to provide subcutaneous O2 in an aseptic and economic package.

In July 2009, management filed a 510K on Wundecyte. The U.S. FDA responded that the bandage will be regulated as a device, and thus management is eligible for an investigation device exemption (IDE). Management plans an animal (pig) feasibility trial in April 2010 to evaluate Wundecyte’s effectiveness at wound healing on different kinds of wounds. This study will look at factors such as time to wound closure and reduction in scar tissue formation as compared to a control group. The next step would be to out-license Wundecyte to a larger organization interested in wound-care.

If approved, Wundecyte could be used in the emergency room (about 1.5 million incidences per year) and available OTC. In the U.S. there are 50 million minor acute skin injuries and 1 million minor burns each year. Management is also testing the addition of Oxycyte to the wound or burn with Wundecyte. This would increase the subcutaneous O2 delivery.

Management is conducting pre-IND work on its oxygen concentration gel for the treatment of mild-to-moderate acne vulgaris, an affliction that impacts nearly 20 million Americans each year. Oxygen Bio believes that Acnecyte has potential to reduce acne through a dual mechanism of action: 1) by increasing oxygen to the skin and promoting healthy blood vessel growth to reduce irritation and inflammation, and 2) by killing the partially anaerobic bacteria (P. acnes) that is linked to causing acne.

Future potential for the company’s topical oxygen concentrated gels includes uses for the treatment of Rosacea with Rosacyte, radiation therapy with Protectocyte and sexual stimulation with Duracyte.

TBI Program Ongoing

On December 4, 2009, management announced the first patient had been enrolled studying Oxycyte in the company’s phase IIb traumatic brain injury (NYSE:TBI) program in Switzerland. STOP-TBI (Safety and Tolerability of Oxycyte in Patients with Traumatic Brain Injury) plans to enroll 98 patients presenting to the emergency room with traumatic brain injury.

The dose escalation study will focus on finding the lowest dose of Oxycyte that provides clinical benefit in traumatic brain injury while minimizing adverse effects. Dose levels of Oxycyte will start at 1.0 ml/kg body weight and escalate in steps to 2.0 ml/kg, and 3.0 ml/kg for subsequent patient cohorts. Escalation of dose will only occur after a favorable review of safety data by an independent Data Safety Monitoring Board (DSMB). Data will be available after every dose cohort is evaluated. Full data is expected in 12 to 18 months.

In March 2010, management provided a brief update that the program was progressing as planned, with 33% of the first cohort now enrolled, including the first patients in Israel. We remind investors that there are a total of 11 sites for the program, 7 in Switzerland and 4 in Israel. We believe the company is on schedule to complete the first phase of this trial in the calendar second quarter 2010, with data to follow shortly after, perhaps by the middle of the calendar year 2010.

An investigator meeting has already been scheduled. The second (45-50 people) and third (35-40 people) cohorts are on track to begin enrolling following the interim analysis of the first cohort.

It is clearly an exciting time for management at Oxygen Biotherapeutics. The company’s first product is now available OTC in Dermacyte, with several more formulations still to come. With Wundecyte, management is in animal testing for a potential revolutionary oxygenating bandage for minor wounds and burns, with the potential to increase the efficacy of the bandage in time by incorporating the company’s proprietary perfluorocarbon, Oxycyte, to enhance oxygen delivery. Finally, with Oxycyte, the phase II STOP-TBI program is now enrolling on plan and we should see data from the first cohort around the middle of the year.